Intel will receive less money from the US Government than it expected. Even so, it is the chip manufacturer that will charge the most

The ‘Chips and Science Act’ program is the largest commitment made by the US with the purpose of strengthening its semiconductor industry within its borders. This plan was approved by the Administration led by Joe Biden in July 2022 and allocates no less than 52 billion dollars specifically to companies that are dedicated to the design or manufacture of integrated circuits.

The semiconductor manufacturer that will receive the most money from the Administration through this plan is Intel. Furthermore, this subsidy will come at a critical time when a capital injection like this will come in handy. Be that as it may, the company led by Pat Gelsinger is objectively the American semiconductor manufacturer that has the most advanced integration technologies.

For this reason it was going to receive $3.5 billion for the production of cutting-edge semiconductors for defense and intelligence applications. The Department of Commerce was going to be responsible for delivering $1 billion from this item within the framework of the ‘Chips and Science Act’ program, so the remaining $2.5 billion should be provided by the Department of Defense. But the plan was foiled. At least momentarily.

This is the money that Intel is presumably going to receive from the US Government

Six months after the agreement between Intel and the Department of Defense stalled, the initial plan resurfaced with force. And the Gelsinger company published a statement in which he anticipated that he will receive a maximum of 3,000 million dollars under the ‘Chips and Science Act’ program to reliably manufacture semiconductors for the US Government. The name of this plan, “Secure Enclave”, reflects one of the requirements demanded by the Administration: the chips must be produced in the strictest confidentiality.

At the beginning of 2024, the US Administration committed to giving Intel a total of close to $20 billion, adding subsidies and loans. The purpose of this money was to help Gelsinger’s company expand its manufacturing infrastructure in the US. A priori I would receive $8.5 billion in subsidies and up to $11 billion in loan guarantees to build its new plants in Arizona, New Mexico, Ohio and Oregon.

Finally, the Administration has decided to cut the money that Intel will receive, although not drastically. The $8.5 billion in subsidies will be reduced to just under $8 billion due in part to the execution of the $3.5 billion contract that Intel has finally agreed to with the Department of Defense. Even so, according to the newspaper The New York Timesthe US Government is concerned about the financial stability of this company.

This has led the Commerce Department to pressure some American companies, such as Microsoft, Apple or Google, to buy chips produced in the US (and presumably Intel). In any case, the Administration will have to hurry to get everything closed before Donald Trump returns to the White House on January 20.

Image | Intel

rmation | The New York Times

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